Really like to work on articles a few days, to even a few weeks (ever so often months) in advance … repeat visits to the draft make for a better post as different moods make for different views.
Well…given the speed of Capital Markets lately… a second or third look may garner a loss of possibility.
Break In: As mentioned above, things are moving quickly, yesterday early in the AM, FOMC (Federal Open Market Committee) chaired by Jerome Powell lowered interest rates by .50 or 50 basis points as an insurance policy against slowing economic conditions. This does not directly affect loan rates, but speaks to a slower economic situation, which does effect rates across the board!
More on this at a later time…. but the following is an all time inter-day low yesterday for the 10 year treasury yield…at least for the moment!
.91% – this from the cell, such the unusual format.
Break In Again: Interestingly, after a big rally on Monday and another set for today, the treasury yield is unexpectedly staying low and not rising dramatically in yield, which is what one would expect. This actually gives loan rates time to catch up in their possible slower decline – making this exercise all the better!
Now… let’s carry on …
Fixed Rate Loans, Especially Long Dated, such as 30 Year Mortgages Need Review
Not withstanding the comments in the opener, interest rates have dropped so fast on Virus fears and possible slowing economic conditions as a result that some loans may have not completely caught up as of yet…
That is an all time low- WOW!
Freddie Mac Rates
Here are the latest average mortgage rates from Freddie Mac as of last week… they are posted only weekly….
Now is a good time to review any fixed rate loans, ESPECIALLY longer dated ones… in refinancing a mortgage, here is a detailed post, the following is the most important nugget from that post…
Think 18 months cost break even – We like to have the saving from the refinance cover the cost of the refinance within 18 months – i.e. Person with $30k mortgage at 5% probably would not need to refinance to 4%, but a $3 million mortgage may be smart to refinance from 4.25% to 4% or the like, if the numbers work out.
Have a Great “Fast Moving Markets” Day!
John A. Kvale CFA, CFP